Friday, January 25, 2013

Chartfest: AAPL, SAM, S&P 500

What a day yesterday. AAPL blew right though all four Fibonacci areas I mentioned and closed at my stop. I did buy some 495 weekly calls for .11 just in case, but it looks like I may have totaled them.

AAPL's action is a great example that correlations in the market only work for as long as they work. Nothing is ever certain. I often say "the market's gonna do what it's gonna do when it's gonna do it." It doesn't care about anything such as volume, ticks, A/Ds, etc. when it really wants to do something. It's a psychological, rather than a mechanical beast, and if you think of it like a cat it begins to make more sense.

Hopefully that explains why I could come up with this chart yesterday. Yes, I'm pretty much a structural bear, but when I see clear patterns emerge that have clear stops, I don't hesitate to chart or trade them simply because they don't fit my view. IF the S&P stays above 1485.16, there may be considerable upside.

Yes, there was a nice correction spotted by this TICK divergence. But unless 1485.16 fails, the market could run. If not, no problem. I will know where I'm wrong to the penny.

Remember SAM? Samuel Adams is trading at all-time highs and at a multi-year Fibonacci 261.8% extension target and it's running on fumes. Its most recent breakout peak had 305,000 shares. This past week it's done 85, 68, 58, and 85K.

I captured this time & sales chart at the close. The second after I saved it, over 4K shares came through. Who knows whether it was a buy or a sell, but I will say that from 11:51am EST, I only saw a couple of 300s, a 500, and a 1000 share trade go buy all day, The rest looked like this. 100 shares over and over and over.

This is the chart I posted a week or so ago.

Updated below, you can see that price did close above the 145.26 Fib target, so my analysis may be wrong. However, it's a multi-year calculation. This week's close is key, as is the monthly close. I don't expect it to stop on a dime, but I've seen it happen many times.

Indeed, it was amazing to see the reaction at the 145.26 area
yesterday. There was a rather sharp reaction, the most excitement in SAM
I saw all day. Also, it was the only area where volume spiked all day (not shown).

Getting back to the S&P, what if 1485.16 fails today or next week? Where could it go?

The next spot I would be interested in would be 1474.51. If that should fail, the entire breakout would be called into question. The knives would likely come out, and it would be a street fight to break or defend 1451.64. If that failed, I'd suddenly get a whole lot more aggressive in my bearishness and my trading.

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